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    Economic regulation, efficiency, and externalities

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    1. Describe one reason why the private market for flu vaccinations would produce an inefficient outcome?

    2. Describe one way that government involvement could achieve an efficient quantity of vaccinations.

    3. Provide one example for each of the following.
    a. Private good
    b. Public good

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    Solution Preview

    1. Flu vaccinations provide a positive externality. That means that provide benefits to third parties who do not choose to consume them. Those third parties can include:
    - Other people, who have a lower risk of infection because vaccines have reduced the number of infected people in the general population.
    - Employers, who ...

    Solution Summary

    Short answers are given to questions about economic regulation, efficiency, and externalities.